2005 (7) TMI 13 - AT - Central Excise

(1) Shortage of goods on stock verification (2) retraction of one Statement (3) Confiscation of Goods

Summary

Issues:
Appeal against duty demands, confiscation of goods, imposition of penalties, and illicit clearance of PVC pipes.

Analysis:
The judgment involves two appeals against manufacturers of rigid PVC pipes, heard together and disposed of by a common order. The first appeal involves duty demands on illicit clearances of rigid PVC pipes and shortages of PVC resins and calcium carbonate. Confiscation of seized quantities and penalties were also imposed. The second appeal similarly involves duty demands on illicit clearances of rigid PVC pipes and shortages of inputs, along with confiscation of seized quantities and penalties. Both appeals were heard together, and the findings are recorded.

Regarding the duty demands on finished goods found short, the admission of the shortage by one of the parties was considered sufficient evidence. The argument that shortages were offset by excess stock in different premises was rejected due to discrepancies in stock tallies. The demands on inputs found short were upheld based on admissions and the nature of the raw materials involved. The contention that the demand was not mentioned in the notice was dismissed as the amounts had already been debited.

The findings on illicit clearance of rigid PVC pipes were upheld based on admissions by the General Manager and internal production records. The retraction of statements was deemed belated and not credible. The argument regarding insufficient raw material and electricity consumption was refuted based on detailed production records and the Commissioner's reliance on admissions and production details. The demands were upheld, and reduction requests were rejected.

Confiscation of inputs and finished products was set aside following a precedent that confiscation requires evidence of intent to evade duty. Confiscation of land/building/plant/machinery was also set aside. Penalties on the manufacturing units were upheld due to upheld duty demands and illicit clearances, but were reduced based on the circumstances. The penalty on the General Manager was reduced in each case. Duty demands were upheld, confiscation was set aside, penalties were reduced, and the appeals were partly allowed based on the detailed analysis and findings in the judgment.